Albertans have been contributing about $47 billion a year to Ottawa in taxes and EI premiums (as shown in the net transfers from 2000-2018 table you can find in Further Data at the bottom of this section). When you consider that this number is roughly equivalent to the operating expense of the entire provincial government, it provides some perspective on its scale. When compared to its population (11.6% of Canada), the 16.66% from Alberta in 2018 of all internal tax revenues is quite remarkable: even in a downturn, Albertans have been contributing nearly 50% more than they would have based on an even per capita contribution level.

We chose to exclude net transfers from CPP, but it would add roughly another $2.7 billion to the annual totals over the last decade, and over $40 billion from 2000-2019 due to the proportion of Albertans who have been working full-time over that period.

It is true that this overall net transfer is in principle a result of Albertans having higher productivity and wages, and a higher proportion of employed people due to a younger population, but the size of the transfer is ultimately due to the extent to which ‘scope creep’ has expanded the federal purse into provincial jurisdiction. 

Put simply, the productivity of Albertans determines the proportion of the pie they contribute, but the amount transferred depends on how big the federal government has made that pie and how it decides to portion it out..
We should note that Albertans’ incomes are not something to apologize for, or to target. Alberta’s productivity and employment rates have certainly been enhanced by its resources, but without decades of elected leaders promoting policies that encouraged investment, and without the nation-leading long hours of hard work put in by individual Albertans, those resources would sit undeveloped – as they have over time in various other provinces.

In addition, a young, productive, and growing population generates its own pressures, such as significant strains on school capacity and other infrastructure, as well as overall inflation and other costs. Alberta has faced such pressures without any unique consideration from federal governments of any political stripe. High productivity areas in a company or in an economy normally invite higher levels of reinvestment; for example, a rational policy would be to leave more money in Alberta so Alberta can make extra infrastructure investments to facilitate ongoing productive activity and wealth creation. 

Unfortunately, in Canada’s current federal system, Alberta’s higher productivity is something that is systematically and exclusively used to fund programs that favour other regions of Canada. 

Where does this money go? Some have the impression that transfers like Equalization somehow come from our provincial government and are sent to other provinces. The reality is, however, that our various federal taxes go to general revenues, and from there all programs are funded.

So when these relatively high dollar amounts Albertans pay go toward core federal expenses such as our military, border agency, and financial regulations, there is no cause for complaint in principle. It has been a very long time, though, since the federal government limited itself to its core functions as originally envisaged in the Constitution. Whenever the federal government starts spending money in areas it doesn’t need to, including areas constitutionally mandated as provincial jurisdiction, Albertans have been disproportionately footing these added bills.